Metalworking and MRO supplies distributor MSC Industrial Supply reported its 2025 second quarter financial results on April 3, showing a continued decline in sales for the December-February period, both sequentially and year-over-year.

For the three months ended March 1, MSC posted total sales of $891.7 million that were down 4.7% year-over-year. Sequentially, that was down from 1Q24’s reported $928.5 million in sales and 2.7% decrease.

The company’s 2Q gross margin of 41.0% was down 50 basis-points year-over-year, but up 30 bps sequentially — attributed partly to favorable supplier rebates.

MSC’s 2Q operating profit of $62.2 million was down 31.7% year-over-year, with operating margin of 7.0% likewise down 270 bps. Net profit of $39.3 million was down 36.4% year-over-year. On an adjusted basis, operating profit of $63.7 million was down 34.9% year-over-year.

“During our fiscal second quarter, we continued expanding our solutions footprint, maintained momentum in the Public Sector, and completed important milestones in reenergizing our core customer growth rate,” MSC CEO Erik Gershwind said in the company’s financial release. “This included launching our website upgrades and an enhanced marketing campaign. Amid a challenging operating environment with industrial demand at low levels, we generated solid results that landed within our guidance range.”

Sales Breakdown

The 2Q24 report showed that average daily sales (ADS) growth declined throughout the quarter. They decreased 8.0% year-over-year in December, 4.9% in January and 1.2% in February, despite a positive acquisitions impacts of 0.8%, 0.6% and 0.6%, respectively. However, MSC’s preliminary estimate for ADS in March showed a 1.3% increase.

MSC’s December ADS was its worst monthly mark since August 2024 (-9.3%).

For the second quarter of 2025, MSC’s national account customers — accounting for 27% of sales — reported a 5.4% drop in ADS. Similarly, core and other customers — 54% of sales —  saw a 6.8% decline. Meanwhile, public sector customers — 9% of sales — experience a 13.2% year-over-year increase.

The report also showed a 4.6% year-over-year decrease in ADS within MSC’s manufacturing end-market, while its non-manufacturing sector posted a 4.9% decline.

eCommerce and Headcount

In 2Q25, 63.64% ($567.5 million) of MSC’s total sales came via eCommerce (including website, EDIT, VMI, vending and more), down sequentially from $591.5 million, and likewise down from the 2Q24’s $591.2 million.

MSC ended its fiscal 2Q25 with a total headcount of 7,261, down from a total of 7,494 in 1Q25, but up from 2Q24’s 7,175. Recent headcount increased include 30 associated from the company’s acquisition of ApTex in 4Q24, 27 associated from the Premier acquisition during the same period and 43 associated from the KAR acquisition in 2Q24.

Full-Year Outlook

MSC released its updated financial outlook for the third quarter (March-May), forecasting average daily sales (ADS) to fare between down 2.0% and 0.0%, along with an adjusted operating margin of 8.7% to 9.3%.

Gershwind added: “While we are encouraged by positive early indicators from our growth initiatives and improving sequential growth rate trends, we have more work to do, and the environment remains uncertain. We are focused on executing our Mission Critical productivity and growth initiatives. Looking forward, this will strengthen MSC’s position in the marketplace and ability to achieve our long-term objectives of reaching 400 basis points or more of growth above the IP Index and expanding operating margins to the mid-teens.”